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Financial and Entrepreneurship Policy

Ministry of Finance is responsible of coordinating various financial services sector policies, including financial markets, transactions in securities, banking, savings, insurance, pensions and other financial services-related social services. This section also includes money laundering and gambling-related policies.

Financial Markets Policy Department is responsible for developing policies, preparing draft legislation and coordinating the implementation of legislation for the banking sector, securities, investment funds and other financial services, as well as financial stability.

Insurance Policy Department is responsible for developing policies, preparing draft legislation and coordinating the implementation of legislation for the field of insurance, pension funds and other financial services related to the field of social security.

Insurance sector

Insurance activities and supervision thereof is regulated by the Insurance Activities Act (2004, unofficial translation and does not include last amendments).

Organisation of Gambling

The definition of gambling is formulated in Gambling Act. According to this gambling is a game where:

The requirement to make a stake exists.

Player can win a prize of monetary value;

The result of the game is determined completely or partially by actions based on chance, or depends on the occurrence of an event not known in advance.

It is allowed to organise gambling games that are in conformity with the requirements of Gambling Act in Estonia.

Organizer of gambling game

The right to organise gambling games shall be held by a reliable person, who conforms to the requirements of Gambling Act and who holds an activity license and an operating license. If the special conditions are prescribed to some categories of gambling in the law, the organiser of gambling must comply with those as well.

The activity license establishes compliance with requirements of the organizer of gambling entitling to applying to the operating license to organise games of chance, totos and games of skill. The activity license is granted for an unspecified term and is not transferable.

The operating license is granted to organise a specific type of gambling like lotteries, totos, games of chance on machines and tables etc. The operating license is also given to organise gambling in a certain place or to open gambling place on a ship.

Lotteries that are organised by the state-owned company

Lotteries may be organised by a completely state-owned public limited company whose share capital is at least 1,000,000 euros, founded for that purpose by the Government of the Republic of Estonia. This company also organises lotteries for supporting the non-profit associations and foundations.

Lotteries organised in support of non-profit associations and foundations

The state-owned company may organise lotteries to accumulate funds in support of a specified purpose of the foundation or the non-profit association. Foundations and non-profit associations who need financial resources to achieve the aims specified in their statutes and who are in conformity with the requirements of the law may apply for the support by the Ministry of Finance.

Promotional Lottery

The organizer of a promotional lottery is obliged to register the promotional lottery in the Registry of Economic Activities prior to starting organising of the promotional lottery. The total prize fund of a promotional lottery may be up to 100,000 euros.

The person planning to organise a promotional lottery shall submit a registration application to the Tax and Customs Board.

Following gambling games can be organised without a license or a registration (the Gambling Act is not applicable):

games of skill in which the only possible prize is the opportunity to play again in the same game;

sports competitions

lotteries with a prize fund up to 1,000 euros

promotional lotteries with a prize fund of up to 10,000 euros.

Money laundering prevention in Estonia

Several organisations’ functions include the prevention of money laundering in Estonia.
Ministry of Finance is responsible for general policy, legislation and coordination of the activities in this area.

Estonian Financial Intelligence Unit (FIU) is an independent structural unit of the Estonian Police and Border Guard Board. Financial Intelligence Unit analyses and verifies information about suspicions of money laundering or terrorist financing, taking measures for preservation of property where necessary and immediately forwarding materials to the competent authorities upon detection of elements of a criminal offence

The Prosecutor's Office, Security Police, Tax and Customs Board and courts in Estonia are working actively to identify the criminals and establish appropriate legal liabilities if necessary.

Financial Supervision Authority is responsible for stability, reliability and transparency of the financial sector of Estonia. As money laundering and terrorist financing is directly connected with stability and reliability of the financial sector, the Financial Supervision Authority exercises supervision in this field as well.

Governmental committee for the coordination of money laundering prevention was established to promote the fight against money laundering and terrorist financing. The Committee is chaired by the Minister of Finance. Representatives from ministries, Tax and Customs Board, The Prosecutor's Office, police, Bank of Estonia and Financial Supervision Authority are members of this Committee. Committee meetings took as often as needed, but at least once in four months.

Advisory Committee of Market Participants was created to channel information and enhance communications regarding the situation in market and to listen to the proposals of market participants. The main aim of the Advisory Committee is to raise the awareness of entrepreneurs and give them an opportunity to be involved in developing the legislation. The members of the Advisory Committee are representatives from different associations of entrepreneurs and other obligated persons. The committee is serviced by the Ministry of Finance.

Also important for the money laundering prevention are the law-abiding citizens of Estonia, especially those who are engaged in the financial sector.

According to the Anti Money Laundering and Terrorist Financing Prevention Act which took effect in 28th January 2008, the number of obligated persons who are required to inform the Financial Intelligence Unit if cash transactions of large value are made, has increased. For example, banks, entrepreneurs providing financial services and organisers of games of chance are defined as obligated persons. But also those who carry out or act as intermediaries in transactions with real estate, pawnbrokers, auditors and entrepreneurs who provide accounting or consulting services.

Obligated persons are considered any trader if a cash payment of at least 15 000 EUR or an equal amount in another currency is made, regardless of whether the financial obligation is performed in a lump sum or in several related payments.

In some cases notaries, lawyers, bailiffs, trustees in bankruptcy etc, ought to follow the requirements of the Money Laundering and Terrorist Financing Prevention Act. In order to enable identification of a natural person or a representative of a legal person, entrepreneurs may ask more information when a contractual relationship is based on a long-term contract or a transaction of a large sum would be made.

Obligated persons, except credit institutions, must inform Financial Intelligence Unit about every transaction where a cash payment of at least 32 000 EUR or an equal amount in another currency is made. Credit institutions have this kind of notification obligation only if providing currency exchange services.

Entrepreneurs have to be registered in the Register of Economic Activities. Financial institutions which are not subject to supervision by the Financial Supervision Authority have to register themselves in Register of Economic Activities. Entrepreneurs who provide services like SMS-loans and other types of loans, pawnbrokers and currency exchange offices have to make the registration as well in order to provide their services in Estonia.

International organisations

FATF

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing.

The FATF is therefore a 'policy-making body' created in 1989 that works to generate the necessary political will to bring about legislative and regulatory reforms in these areas.

During 1991 and 1992, the FATF expanded its membership from the original 16 to 28 members. In 2000 the FATF expanded to 31 members, in 2003 to 33 members, and in 2007 it expanded to its current 35 members. For more see FATF members and observers.

Moneyval

‘Moneyval’ means the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism.

Moneyval (formerly PC-R-EV) was established in 1997. This evaluation and peer pressure mechanism reviews the anti-money laundering measures and measures to counter the financing of terrorism in Council of Europe member States (and Council of Europe applicants which apply to join the terms of reference) which are not members of the Financial Action Task Force (FATF).

The aim of Moneyval is to ensure that its member states have in place effective systems to counter money laundering and terrorist financing and comply with the relevant international standards in these fields.